Marine Insurance Rate and Calculation Practice

Overview

A marine insurance rate is the rate used in marine cargo insurance to reflect risks associated with the cargo, route, method of transportation, packing, insurance conditions, and other underwriting factors in the calculation of premium.

The basic calculation is “sum insured × insurance rate,” but practical premium calculation requires more than this formula alone. The Marine Rate, War & Strikes Rate, Additional Premium, Minimum Premium, vessel conditions, calculation of the sum insured under CIF, CFR, and FOB terms, agreed rates under an Open Policy, and individual underwriting of exceptional cargoes must be distinguished.

The insurance rate is not merely a price from a tariff. Even where the cargo value is identical, underwriting may differ according to the nature of the cargo, packing, route, vessel, transshipment, loss experience, and scope of cover.

This article does not provide the current numerical rates of any particular insurer. Instead, it explains the different components of cargo insurance rates, the information required for underwriting, and the methods used to calculate premium and the sum insured under CIF, CFR, and FOB terms.

Actual rates, Minimum Premiums, additional rates, rounding rules, indices, and individual underwriting requirements vary according to the insurer, contract, and date of shipment. The quotation, rate table, policy, Open Policy terms, and confirmation from the insurer or insurance agent must therefore control the final calculation.

Specific Scope of This Article

Item	What This Article Covers	What Other Articles Cover
Marine Rate	Rate structure for ordinary transportation risks	Detailed ICC(A), ICC(B), and ICC(C) coverage is addressed in cargo-clause articles
War & Strikes Rate	Separate rating of war, strikes, and related risks and its potential volatility	Detailed Institute War and Strikes Clauses are addressed separately
Additional Premium	Additional premium for risks outside ordinary agreed conditions	Coverage of an individual casualty is addressed in claims articles
Vessel conditions	Effect of vessel age, classification, and type on rating	Seaworthiness and carrier responsibility are addressed separately
CIF calculation	Calculation of premium and sum insured from a CIF value	Seller and buyer obligations under Incoterms are covered separately
CFR and FOB calculation	Reverse calculation where insurance itself must be included	Calculation of Freight is addressed in logistics-cost articles
Premium and sum-insured indices	Use of indices instead of manual reverse calculation	Current insurer-specific index values must be checked under the actual contract
Minimum Premium	Application of a minimum amount where the calculated premium is small	Actual minimum amounts depend on the contract
Open Policy	Agreed rates, Declarations, periodic settlement, and exceptional cargoes	Detailed Declaration procedures are addressed in the Open Policy article
Underwriting	Information and factors relevant to rate determination	Internal insurer underwriting manuals are outside the scope of this article

Basic Structure of Cargo Insurance Rates

Rate or Premium	Main Risk	Main Rating Factors	Practical Review
Marine Rate	Ordinary transportation risks	Cargo, route, packing, conditions, transportation method, and loss experience	Review the quotation and agreed rate
War & Strikes Rate	War, strikes, and related risks	Geopolitical conditions, route, port conditions, risk areas, and market conditions	Confirm the rate applicable at the time of shipment
Additional Premium	Additional risks outside ordinary conditions	Vessel conditions, special cargo, special route, and changes in circumstances	Identify the reason and additional rate
Minimum Premium	Small individual shipments	Insurer and form of contract	Compare the calculated premium with the contractual minimum
Individual underwriting rate	High-value, special, or exceptional cargo	Value, cargo risk, accumulation, and transportation plan	Do not automatically apply the standard agreed rate

Marine Rate

The Marine Rate is the basic rate applicable to ordinary cargo transportation risks, including relevant sea, air, and inland transit risks within the insured transit.

The rate may reflect the nature of the cargo, packing, route, mode of transportation, transshipment, insurance conditions, seasonal factors, and historical loss experience.

Because the scope of cover under ICC(A) is different from that under ICC(B) or ICC(C), rates may differ even for the same cargo.

There is, however, no universal fixed percentage applicable merely because a shipment is insured under ICC(A), ICC(B), or ICC(C). The actual rate is determined by the insurer’s underwriting decision and contractual terms.

War & Strikes Rate

War and strikes risks may be rated separately from the Marine Rate through a War & Strikes Rate or War & S.R.C.C. Rate.

These rates relate to risks falling within the applicable war and strikes clauses, which may include war, civil war, hostile acts, strikes, riots, civil commotions, and other insured political or conflict-related perils depending on the wording used.

War risks are particularly sensitive to geopolitical conditions. As a result, War & Strikes Rates may change over a much shorter period than ordinary Marine Rates.

A rate quoted when the commercial quotation is prepared should therefore not automatically be assumed to remain applicable on the actual shipment date.

Do Not Confuse London Market Listed Areas with a Cargo War Premium Schedule

The London Market Joint War Committee (JWC) publishes Listed Areas identifying geographical areas considered to present enhanced exposure to war, piracy, terrorism, and related marine risks.

Such London Market information may be relevant when assessing the international marine war-risk environment.

However, the JWC Listed Areas are not themselves a uniform cargo war premium tariff applicable automatically to Japanese marine cargo insurance. Nor does inclusion within a Listed Area automatically produce a specified cargo additional premium.

In cargo insurance practice, the relevant insurer’s War & Strikes Rate Table, agreed Open Policy terms, individual underwriting confirmation, and risk conditions at the time of shipment must be reviewed.

The more accurate approach is therefore that London Market risk-area information may form part of the wider market assessment, while the actual cargo war rate is determined under the terms and underwriting decision of the insurer providing the cargo insurance.

Held Covered and Additional Premium

The expressions Held Covered or H/C may appear in rate tables or insurance conditions.

Held Covered generally refers to continuation of cover, subject to specified requirements, at a premium to be arranged.

Where there is a material change such as a route deviation, unscheduled call, entry into an enhanced-risk area, or another departure from the original underwriting conditions, the insured should notify the insurer or insurance agent and confirm both continuation of cover and any Additional Premium.

Held Covered does not mean unconditional automatic cover. Notice requirements, Additional Premium, and other conditions are governed by the actual wording and contract.

Additional Premium

Additional Risk	Item to Confirm	Possible Rating Effect	Practical Response
Vessel conditions	Age, classification, and type	Additional Premium or individual underwriting	Confirm when the vessel becomes known
Special cargo	Heavy cargo, used goods, art, exhibition cargo, etc.	May fall outside the ordinary agreed rate	Submit cargo information before shipment
Dangerous goods	UN No., Class, Packing Group, etc.	May require individual rate and conditions	Submit the SDS and related information
Enhanced-risk route	Conflict, port conditions, and route changes	May affect the War & Strikes Rate or require A/P	Reconfirm immediately before shipment
Special transportation	On-deck carriage, non-self-propelled craft, special vessels	Additional conditions may apply	Declare the transportation method accurately
Extended coverage	Additional risks beyond ordinary cover	Additional premium may be required	Review coverage and rate together

Institute Classification Clause and Vessel Conditions

Where an Institute Classification Clause or comparable vessel condition is incorporated into cargo insurance, the vessel’s classification, age, type, and trading characteristics may affect underwriting.

The analysis should not be reduced to a statement such as “every vessel over 15 years automatically attracts an additional premium.” The applicable wording, vessel type, liner-trade status, and other conditions must be reviewed.

If a vessel may fall outside the standard conditions of the applicable clause, the vessel name, year built, classification, type, and other required information should be submitted to the insurer or insurance agent to determine whether an Additional Premium or individual underwriting is required.

Why Vessel Age, Classification, and Type Matter

Item	What to Confirm	Relationship with Rating	Practical Caution
Vessel age	Year built	Compliance with the applicable vessel conditions	Do not determine the result from age alone
Classification	Classification society and current class status	Compliance with standard conditions	Confirm current status, not merely the name of the society
Vessel type	Container Vessel, Bulk Carrier, General Cargo Vessel, etc.	Different vessel conditions may apply	The same age may not produce the same result for every vessel type
Trading pattern	Liner or non-liner operation	May affect treatment under the applicable wording	Confirm the actual trading circumstances
Special vessel	Wooden vessel, non-self-propelled craft, etc.	May require individual underwriting or A/P	Do not automatically apply ordinary-vessel rates
Method of stowage	Under-deck or on-deck carriage	May affect cargo-risk assessment	Review the insurance conditions at the same time

Cargo, Packing, and Transportation Method

Cargo or Condition	Main Risk	Main Evidence	Possible Underwriting Effect
Precision equipment	Shock, vibration, moisture, condensation	Packing specifications and transportation method	Packing conditions may be important
Food and refrigerated cargo	Deterioration and temperature deviation	Temperature requirements and transport records	Temperature-risk coverage must be reviewed
Used machinery	Pre-existing damage, rust, and inadequate packing	Photographs, Condition Report, packing specifications	Individual conditions may apply
Dangerous goods	Fire, explosion, and leakage	SDS and dangerous-goods declaration	Individual underwriting may be required
Heavy cargo	Cargo shifting, dropping, and securing failure	Weight, centre of gravity, and stowage plan	The transportation plan may require review
Lightly packed cargo	Breakage, wet damage, and shifting	Packing photographs and specifications	May affect both rate and coverage terms

Underwriting and Rate Determination

Underwriting is the process by which an insurer evaluates a risk and determines whether to accept it and on what terms and rate.

Marine cargo underwriting may consider the cargo, sum insured, route, transportation method, packing, transshipment, insurance conditions, and historical loss experience.

The rate should therefore be understood as the result of risk assessment rather than simply a percentage attached to the cargo value.

If important information such as the vessel, transportation method, or cargo characteristics remains unknown when the quotation is issued, the quoted rate may be provisional. The rate and conditions should be reconfirmed when the missing information becomes available.

Practical Rate-Determination Flow

For a new shipment, the insurance rate and Sum Insured should be determined through a sequential review rather than by applying a percentage in isolation.

1. Confirm the cargo description, value, quantity, package type, packing method, and other cargo information.
2. Confirm whether the commercial term is CIF, CFR, or FOB.
3. Confirm the loading point, destination, transit points, transshipment ports, and the sea, air, or inland transportation method.
4. Once the vessel is nominated, review the vessel age, classification, type, trading pattern, and other relevant vessel conditions where required.
5. Confirm whether the shipment involves dangerous goods, high-value cargo, used goods, heavy cargo, exhibition cargo, temperature-controlled cargo, or another special or exceptional risk.
6. Distinguish the applicable Marine Rate from the War & Strikes Rate and confirm the rate and underwriting conditions applicable at the time of shipment.
7. Under an Open Policy, confirm whether the shipment falls within the agreed rate or requires individual underwriting as an exception.
8. Select the contractual method for calculating the Sum Insured according to whether the trade term is CIF, CFR, or FOB.
9. Where CFR or FOB requires the premium itself to be incorporated by reverse calculation, use the authorised Premium Index, Sum Insured Index, or reverse-calculation formula.
10. Confirm whether a Minimum Premium, Additional Premium, Held Covered condition, or another additional term applies.
11. Finalise the applicable rate, Sum Insured, premium, and insurance conditions on the basis of the insurer’s or insurance agent’s quotation or confirmation.

A final check should also be made immediately before shipment to ensure that the vessel, route, War & Strikes Rate, and other material underwriting conditions have not changed since the original quotation.

Basic Premium Calculation

The basic relationship is:

Premium = Sum Insured × Rate

When used in a formula, a rate of 0.30% is expressed as 0.003 and a rate of 0.25% as 0.0025.

The method used to determine the Sum Insured must first be identified because the calculation differs among CIF, CFR, and FOB transactions.

Calculation Based on CIF

A CIF value includes Cost, Insurance, and Freight. Where the insurance contract provides for a Sum Insured equal to 110% of CIF, the calculation is:

Sum Insured = CIF × 110%

Premium = CIF × 110% × R

where R is the insurance rate.

If the CIF value is JPY 10 million and the rate is 0.30%, the Sum Insured is JPY 11 million and the premium is JPY 33,000.

Any separate War & Strikes Rate, Additional Premium, or Minimum Premium must also be considered where applicable.

CFR and FOB Require Reverse Calculation Where Insurance Is Included in the Valuation

CFR does not include Insurance. FOB does not include Freight or Insurance, so Freight must first be added when an FOB value is used.

Let Cost be C, Freight be F, and the insurance rate be R.

Where the Sum Insured is 110% of the CIF-equivalent amount including the premium itself:

Sum Insured S = 1.1 × (C + F + Premium)

Premium = S × R

Combining these equations gives:

Premium = (C + F) × 1.1R ÷ (1 − 1.1R)

Sum Insured = 1.1(C + F) ÷ (1 − 1.1R)

The denominator “1 − 1.1R” is necessary because the premium being calculated itself forms part of the CIF-equivalent value from which the Sum Insured is derived.

Worked CFR or FOB Reverse-Calculation Example

Assume that C + F is JPY 20 million and that the insurance rate is 0.25%.

R = 0.0025.

Premium = 20,000,000 × 1.1 × 0.0025 ÷ (1 − 1.1 × 0.0025)

= approximately JPY 55,152

The Sum Insured is:

1.1 × 20,000,000 ÷ (1 − 1.1 × 0.0025)

= approximately JPY 22,060,667

The actual policy may specify rounding rules for the Sum Insured or premium. The insurer’s or insurance agent’s final calculation should therefore be confirmed.

Premium Index and Sum Insured Index

Instead of performing the reverse calculation manually for every CFR or FOB shipment, a Premium Index Table or Sum Insured Index Table provided by the insurer or insurance agent may be used.

The basic structure is:

Premium = Premium Index corresponding to the rate × (C + F)

Sum Insured = Sum Insured Index corresponding to the rate × (C + F)

In theoretical terms, the Premium Index corresponds to:

1.1R ÷ (1 − 1.1R)

and the Sum Insured Index corresponds to:

1.1 ÷ (1 − 1.1R)

The actual index table supplied under the insurance contract should be used for operational Declarations rather than a self-created index.

Minimum Premium

A Minimum Premium may apply even where the premium calculated from the rate is small.

For example, if the calculated premium is JPY 1,200 but the contractual Minimum Premium is higher, the amount charged may be determined by the contractual minimum.

The amount and unit of application vary by insurer and contract.

The treatment may also differ between individual shipment insurance and an Open Policy, so small shipments should not be priced by reference to the percentage rate alone.

Open Policy and Agreed Rates

Under an Open Policy, agreed rates may be established in advance for recurring shipments based on cargo type, route, insurance conditions, and other agreed criteria, with individual shipments subsequently reported by Declaration.

Ordinary shipments may be processed at agreed rates, while high-value cargo, dangerous goods, special cargo, unusual transportation methods, vessels outside standard conditions, or enhanced-risk routes may require individual underwriting.

An effective Open Policy process should therefore manage both the agreed-rate matrix and the list of exceptions requiring prior confirmation.

Situations in Which Rates May Be Reviewed

Situation	Change in Risk Information	Possible Rating Effect	Practical Response
Policy renewal	Annual loss experience and turnover	Review of agreed Marine Rates	Review Loss Records and shipment data
New product line	Cargo characteristics and packing	Different rate may apply	Obtain a quotation in advance
Route change	Transit and transshipment ports	May affect Marine or War Rates	Notify before the change
Geopolitical deterioration	War Risk	War & Strikes Rate may change rapidly	Reconfirm immediately before shipment
Vessel change	Age, classification, and type	May require A/P or individual underwriting	Confirm when the vessel is known
Extension of cover	Wider insured risks	Marine Rate or other rates may be revised	Review coverage and rate together

Main Documents for Rate Determination

Document	Purpose	Importance	Action if Missing
Quotation and rate table	Applicable rate and conditions	Essential	Confirm with the insurer or insurance agent
Policy and Open Policy agreement	Agreed conditions and eligible cargo	Essential	Identify the applicable contract
Invoice	Cost and CIF, CFR, or FOB value	Essential	Confirm the trade term
Freight documentation	CFR and FOB calculations	High	Determine Freight
Packing List	Cargo, package type, and quantity	High	Complete cargo information
B/L, Sea Waybill, or Air Waybill	Route and transportation method	High	Also review Booking information
Vessel information	Age, classification, and type	High where applicable	Confirm with the shipping line or other relevant party
SDS and dangerous-goods documents	Dangerous-goods underwriting	Essential where applicable	Do not apply ordinary rates until classification is confirmed
Loss Record	Renewal and rate negotiation	High	Compile an appropriate period of loss experience

Cases Commonly Problematic in Practice

Case	Main Problem	Evidence	Practical Response
110% was omitted from a CIF calculation	Insufficient Sum Insured	Invoice and policy	Confirm the contractual valuation basis
A CFR value was simply multiplied by 110%	Insurance was not incorporated by reverse calculation	Invoice, Freight, and Rate	Use the reverse formula or index table
Only the FOB value was used	Freight was omitted	FOB Invoice and Freight	Determine C + F before calculation
A standard agreed rate was applied to special cargo	Individual underwriting requirement was overlooked	Open Policy and cargo information	Check exception conditions
Vessel conditions were not reviewed after nomination	Additional Premium was overlooked	Vessel name, age, and classification	Obtain confirmation before shipment
An old War Rate was reused	The rate no longer matched shipment-date conditions	Latest rate table and insurer confirmation	Reconfirm at shipment
Minimum Premium was ignored	Quoted premium differed from the amount charged	Contract terms	Confirm the Minimum Premium
Another insurer’s rate table was used	Contract terms did not match	The insured’s own contract	Use the actual insurer’s terms

Application Scenario 1: CIF Value of JPY 10 Million

The following is a hypothetical example illustrating the calculation structure.

General machinery parts are shipped from Yokohama to Singapore with a CIF value of JPY 10 million. Assume that the policy provides a Sum Insured equal to 110% of CIF and a Marine Rate of 0.30%.

The Sum Insured is JPY 11 million and the Marine Premium is:

JPY 11,000,000 × 0.30% = JPY 33,000

The cargo owner questions why the premium is not JPY 30,000, calculated as JPY 10 million × 0.30%.

The insurance agent explains that the contractual rate is applied to the Sum Insured, which in this case is 110% of the CIF value.

Any separate War & Strikes Rate, A/P, or Minimum Premium must also be reviewed before determining the final premium.

Application Scenario 2: Reverse Calculation from a CFR Value of JPY 20 Million

Equipment parts are shipped from Kobe to Bangkok with a CFR value of JPY 20 million and an insurance rate of 0.25%.

The cargo owner initially assumes that JPY 20 million × 110%, or JPY 22 million, is the correct Sum Insured.

However, CFR does not include Insurance, and under this example the premium itself forms part of the CIF-equivalent value from which the 110% Sum Insured is calculated.

Before contractual rounding, the calculated premium is approximately JPY 55,152 and the Sum Insured approximately JPY 22,060,667.

The key point is that simply multiplying C + F by 110% is not mathematically identical to a calculation in which the premium itself must first be incorporated into the CIF-equivalent value.

Application Scenario 3: Additional Premium Due to Vessel Conditions

Machinery parts with a CIF value of JPY 24 million are scheduled for shipment from Osaka to Jakarta. The preliminary Marine Rate is 0.25%.

After Booking, the nominated vessel becomes known and its age, type, or other particulars require individual review under the vessel conditions incorporated into the insurance contract.

The cargo owner argues that previous Osaka–Jakarta shipments were insured at 0.25%.

The insurer responds that the previously used vessel was different and that the prior rate cannot automatically be applied to the newly nominated vessel.

Assume, solely for illustration, that an A/P of 0.15% is required, producing a total rate of 0.40%. On a Sum Insured of JPY 26.4 million, 0.25% produces JPY 66,000, while 0.40% produces JPY 105,600.

The 0.15% A/P in this scenario is hypothetical. Actual additional rates depend on the relevant vessel conditions and the insurer’s underwriting decision.

Application Scenario 4: War & Strikes Rate Changes Immediately Before Shipment

Precision equipment with a CIF value of JPY 50 million is scheduled for shipment from Tokyo to Europe. At the quotation stage, assume that the War & Strikes Rate is 0.05%.

Before actual shipment, geopolitical conditions deteriorate and the insurer confirms a revised War & Strikes Rate of 0.20% for the relevant shipment.

The cargo owner argues that the commercial quotation was prepared on the basis of 0.05%, while the insurance agent explains that the contract applies the war rate in force under the agreed shipment-date conditions.

On a Sum Insured of JPY 55 million, 0.05% equals JPY 27,500 and 0.20% equals JPY 110,000, a difference of JPY 82,500.

The practical lesson is that the rate should not be self-determined solely from London Market geographical information. The War & Strikes Rate actually applicable under the cargo insurance contract must be confirmed with the insurer.

Application Scenario 5: Exceptional Cargo Under an Open Policy

A manufacturer regularly exporting machinery maintains an Open Policy with an agreed Marine Rate of 0.20% for ordinary cargo.

During one month it plans an overseas exhibition shipment of large machinery with a Sum Insured of JPY 80 million.

The accounting team attempts to declare the shipment at the normal 0.20% rate, but the Open Policy requires prior individual underwriting for exhibition cargo and specified high-value shipments.

The cargo owner argues that the annual policy should apply the agreed rate to every shipment. The insurer responds that the agreed rate applies only within the declared scope and that exceptional cargo remains subject to individual underwriting.

Assume, for illustration, that the individually agreed rate is 0.45%. The premium would be JPY 160,000 at 0.20% and JPY 360,000 at 0.45%, a difference of JPY 200,000.

The key point is that an Open Policy does not necessarily place every cargo at one unconditional rate; agreed rates and exception conditions must be administered together.

Common Misconceptions

Misconception	Actual Practice	Practical Caution
The insurance rate is determined only by cargo value	Cargo, route, packing, transportation method, coverage, and loss experience are also relevant	Provide complete risk information
A 0.30% rate is simply multiplied by the Invoice value	The Sum Insured must first be determined	Distinguish CIF, CFR, and FOB
CFR can always be calculated accurately by multiplying CFR by 110%	Reverse calculation is required where the premium forms part of the CIF-equivalent valuation	Use the formula or the official index table
FOB can be calculated from the FOB value alone	Freight must first be added	Obtain the Freight amount
War rates remain fixed for the entire year	They may change rapidly with geopolitical conditions	Confirm at the time of shipment
The JWC Listed Areas provide a uniform cargo war premium rate	They identify enhanced-risk areas and are not themselves the cargo premium tariff for an individual policy	Confirm the insurer’s applicable rate
Every vessel above a fixed age attracts the same A/P	The applicable wording, vessel type, and operating conditions must be reviewed	Check the actual vessel conditions
Every shipment under an Open Policy uses the agreed rate	High-value, special, or dangerous cargo may require individual underwriting	Review exception conditions
The cheapest rate is always the best insurance	Differences in coverage and exclusions prevent comparison by rate alone	Compare rate and coverage together
Minimum Premium is irrelevant once a percentage rate is known	A contractual Minimum Premium may exceed the calculated amount	Check small shipments carefully

Decision Checklist

Situation	Party to Consult	Item to Confirm	Action if a Problem Is Identified
Requesting a quotation	Cargo owner and insurance agent	Cargo, value, route, conditions, and packing	Do not treat an incomplete quotation as a final rate
Confirming trade terms	Cargo owner and sales personnel	CIF, CFR, or FOB	Use the appropriate valuation method
CFR or FOB calculation	Insurance agent	C, F, R, and applicable index	Use the reverse formula or authorised index table
Special cargo	Cargo owner and insurer	Whether the agreed rate applies	Request individual underwriting
Vessel nomination	Shipping line and insurer	Age, classification, and vessel type	Confirm whether A/P applies
Enhanced-risk route	Insurer or insurance agent	Current War & Strikes Rate	Confirm any additional premium before shipment
Held Covered situation	Insurer	Notice requirements, A/P, and continuation of cover	Notify promptly
Small individual shipment	Insurance agent	Minimum Premium	Compare it with the calculated premium
Open Policy Declaration	Internal insurance personnel and insurance agent	Agreed rate and exceptional cargo	Separate shipments requiring individual confirmation
Policy renewal	Insurer or insurance agent	Annual turnover, Loss Record, and rates	Confirm the reason for any rate revision
Comparing insurers	Insurance agent	Coverage, exclusions, and Minimum Premium	Do not compare percentage rates alone

When to Consult the Insurer or Insurance Agent

• Calculating a Sum Insured from CFR or FOB where Insurance must be incorporated
• The applicable Premium Index or Sum Insured Index is unclear
• The vessel’s age, classification, or type may fall outside ordinary conditions
• High-value cargo, dangerous goods, used goods, exhibition cargo, heavy cargo, or other special cargo is to be insured
• The War & Strikes Rate may have changed
• The route or condition is shown as Held Covered or H/C
• It is unclear whether an Open Policy agreed rate applies to a particular shipment
• The Minimum Premium, A/P, or individual underwriting condition is unclear
• Actual shipment conditions differ from those originally quoted

Summary

Marine cargo insurance rates are not merely percentages used in arithmetic. They are the result of underwriting based on cargo, route, packing, transportation method, insurance conditions, vessel conditions, and loss experience.

Marine Rate, War & Strikes Rate, Additional Premium, Minimum Premium, and individual underwriting rates should be distinguished in practice.

London Market information such as JWC Listed Areas may assist in understanding the international war-risk environment, but it should not be treated as a uniform cargo war premium schedule automatically applicable to Japanese cargo insurance. The actual rate must be confirmed under the relevant insurer’s War & Strikes Rate Table, policy terms, and underwriting decision.

Where the contractual Sum Insured is 110% of CIF, CIF-based premium calculation is comparatively straightforward. For CFR and FOB transactions, however, Insurance is not already included, so the Sum Insured may require reverse calculation or the use of a Premium Index or Sum Insured Index.

In particular, simply multiplying C + F by 110% should not be confused with a calculation that incorporates the premium itself into the CIF-equivalent value.

An Open Policy likewise does not necessarily apply one unconditional agreed rate to every shipment. High-value cargo, special cargo, dangerous goods, and shipments outside ordinary vessel or route conditions may require individual underwriting.

Cargo owners, freight forwarders, and insurance agents should therefore evaluate not only the apparent percentage rate but also the valuation method, coverage, exception conditions, Additional Premiums, Minimum Premiums, and the War & Strikes Rate applicable at the actual time of shipment.